Chapter 8:Benchmarking

Stacey Beavin

Stacey Knight

Carla Wesner

Benchmarking

Systematic search for best practices, innovative ideas, and highly effective business operating proceduresA tool to achieve best business practices, NOT a strategyMakes a company look outside itself to determine if they are staying competitive in the marketOften hard to identify best-in-class performers

Benchmarking Process: 6 Steps

1. Decide what to benchmark• Organizations need to decide where they

want to be in the marketplace• This is determined by use of vision and

mission statements • Critical success factors

2. Understand Current Performance

• Flow diagrams, cause-effect charts

• Quantify

3. Plan - What type of benchmarking will be performed?

• Internal – looking at similar processes in a different operating division of the same organization

• Product competitors – Check out what your competitors are doing

• Process – Look at similar processes in other industries

4. Study Others

• On-site visits

• Questionnaires, surveys

5. Learning from the Data

• Negative gap (external processes better than internal

• Parity (process performances equal)

• Positive gap (internal process better than external)

• Description of a process must be detailed and quantifiable

6. Use the Findings

• Translate into goals and objectives

• Process owners and upper management must buy-in

• Execute the plan

1) Specify tasks

2) Sequence tasks

3) Determine resource needs

4) Establish a task schedule

5) Assign responsibility for each task

6) Describe expected results

7) Specify methods for monitoring results

Discussion Questions

What is the difference between a benchmark and a goal?

What is breakthrough performance?

Based on your current experiences, what areas do you feel are weak and could benefit from a benchmarking study?

•What product competitors do you think could be used?

•What other organizations could you use to establish process benchmarks?

Which part of the benchmarking process do you think would be most likely to collapse?